Posts Tagged ‘household net work’

HOUSEHOLD BALANCE SHEETS AND THE RECOVERY

HOUSEHOLD BALANCE SHEETS AND THE RECOVERY

Courtesy of The Pragmatic Capitalist

Pedro Amaral of the Cleveland Fed wrote an excellent piece in today’s “Economic Trends” on the state of the recovery and the cause of the slower than normal recovery.  His conclusions are exactly in-line with my own: we are in a balance sheet recession that is largely caused by the implosion of the household balance sheet:

“The chart below shows the behavior of households’ (and nonprofit organizations’) net worth in the last six recessions. It is apparent that in the last two the damage to households’ balance sheets was both deeper with and more protracted than in the previous episodes. What was behind the drop in the latest recession? During this period, liabilities were roughly constant, so the drop happened because of declines in asset values caused by the real-estate collapse and the subsequent depreciation in financial assets. In the 2000 recession the drop was due to the stock market collapse. In contrast, in the twin recessions of the early 1980s, net worth never decreased, and in the early 1990s it dropped only about 2 percent.”

cleve12 HOUSEHOLD BALANCE SHEETS AND THE RECOVERY

“The drops in household net worth help explain the protracted recoveries after the last two recessions. Personal consumption expenditures are the single biggest component of GDP at around 70 percent. If there is to be a solid recovery, consumption needs to increase at a substantially higher rate than the 1.7 percent it has averaged over the last year. But households are not going to start consuming at substantially higher rates until they have fixed their balance sheet problems. This is why the savings rate has been so high lately: Households are working hard at improving their wealth to income ratios at the expense of consumption. In previous recessions, since net worth did not fall by a substantial amount, this was not a problem. As incomes started growing again, consumption followed suit. Right now, an important part of that income growth is being channeled to savings. As the chart above illustrates, net worth is still well below prerecession levels and, barring an increase in asset prices (real-estate prices or stock market prices), the only way to increase it is by saving more and consuming less, further delaying the recovery.”

His conclusion, clearly, is similar to my own.  We will not see above trend growth until the consumer balance sheet is…
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Zero Hedge

Italy Rejects Two More NGO Migrant Ships; Merkel Scrambles To Keep Job As German Lawmakers Revolt

Courtesy of ZeroHedge. View original post here.

Italy demanded on Saturday that the Netherlands recall two NGO-operated migrant transport ships flying the Dutch flag, after Italian Interior Minister Matteo Salvini warned that they would not be allowed to dock in Italian ports. 

The ships are currently sitting off the coast...



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Phil's Favorites

Short-term changes in Antarctica's ice shelves are key to predicting their long-term fate

 

Short-term changes in Antarctica's ice shelves are key to predicting their long-term fate

The northeast edge of the Venable Ice Shelf, near Antarctica’s Allison Peninsula. NASA/John Sonntag, CC BY

Courtesy of Helen Amanda Fricker, University of California San Diego; Fernando Paolo, California Institute of Technology; ...



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Digital Currencies

CIA 'Neither Confirms Nor Denies' Knowledge Of True Identity Of Satoshi Nakamoto

Courtesy of ZeroHedge. View original post here.

Authored by Helen Partz via CoinTelegraph.com,

The U.SCentral Intelligence Agency (CIA) has “neither [confirmed] nor [denied] the existence” of information regarding the real identity of ...



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Insider Scoop

Wells Fargo Sees More Upside For WWE Thanks To 'Raw And 'Smackdown'

Courtesy of Benzinga.

Related WWE 10 Biggest Price Target Changes For Friday 8 Biggest Price Target Changes For Monday ...

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Chart School

Decision Time for Dow and Semiconductor Index

Courtesy of Declan.

Bulls have done a good job of clawing back the losses generated by the individual days of selling which have peppered the market since April's lows.

The S&P had reversed from the point of the March high in what looked to be a good shorting opportunity but the lack of follow-through leaves this play vulnerable to a swift exit. A short-stop at 2,792 is the best protective play but further highs are looking more likely.


The two indices which have the most to offer are the Dow and the ...

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Biotech

Mind molding psychedelic drugs could treat depression, and other mental illnesses

Reminder: Pharmboy and Ilene are available to chat with Members, comments are found below each post.

 

Mind molding psychedelic drugs could treat depression, and other mental illnesses

By agsandrew/shutterstock.com

Courtesy of David E. Olson, University of California, Davis

It seems that psychedelics do more than simply alter perception. According to the latest research from my colleagues and me, they change the structures of neurons th...



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ValueWalk

Buffett At His Best

By csinvesting. Originally published at ValueWalk.

Bear with me as I share a bit of my history that helped me create SkyVu and the Battle Bears games. The University of Nebraska gave me my first job after college. I mostly pushed TV carts around, edited videos for professors or the occasional speaker event. One day, Warren Buffet came to campus to speak to the College of Business. I didn’t think much of this speech at the time but I saved it for some reason. 15 years later, as a founder of my own company, I watch and listen to this particular speech every year to remind myself of the fundamentals and values Mr. Buffett looks for. He’s addressing business students at his alma mater, so I think his style here is a bit more ‘close to home’ than in his other speeches. Hopefully many of you find great value in this video like I have. Sorry for the VHS...



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Kimble Charting Solutions

The Stock Bull Market Stops Here!

 

The Stock Bull Market Stops Here!

Courtesy of Kimble Charting

 

The definition of a bull market or bull trends widely vary. One of the more common criteria for bull markets is determined by the asset being above or below its 200 day moving average.

In my humble opinion, each index above remains in a bull trend, as triple support (200-day moving averages, 2-year rising support lines, and February lows) are still in play ...



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Members' Corner

Cambridge Analytica and the 2016 Election: What you need to know (updated)

 

"If you want to fundamentally reshape society, you first have to break it." ~ Christopher Wylie

[Interview: Cambridge Analytica whistleblower: 'We spent $1m harvesting millions of Facebook profiles' – video]

"You’ve probably heard by now that Cambridge Analytica, which is backed by the borderline-psychotic Mercer family and was formerly chaired by Steve Bannon, had a decisive role in manipulating voters on a one-by-one basis – using their own personal data to push them toward voting ...



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Mapping The Market

The tricks propagandists use to beat science

Via Jean-Luc

How propagandist beat science – they did it for the tobacco industry and now it's in favor of the energy companies:

The tricks propagandists use to beat science

The original tobacco strategy involved several lines of attack. One of these was to fund research that supported the industry and then publish only the results that fit the required narrative. “For instance, in 1954 the TIRC distributed a pamphlet entitled ‘A Scientific Perspective on the Cigarette Controversy’ to nearly 200,000 doctors, journalists, and policy-makers, in which they emphasized favorable research and questioned results supporting the contrary view,” say Weatherall and co, who call this approach biased production.

A second approach promoted independent research that happened to support ...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

NewsWare: Watch Today's Webinar!

 

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All About Trends

Mid-Day Update

Reminder: Harlan is available to chat with Members, comments are found below each post.

Click here for the full report.




To learn more, sign up for David's free newsletter and receive the free report from All About Trends - "How To Outperform 90% Of Wall Street With Just $500 A Week." Tell David PSW sent you. - Ilene...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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